Canwest gets another extension to reach deal with creditors

Canwest Global Communications Corp. said Monday a key group of creditors agreed to extend a midnight deadline for its Canwest Media Inc. subsidiary to reach a deal on a long-term recapitalization.

That deadline has now been extended to the end of June and the company still faces a July 15 deadline to come up with a definitive agreement.

Canwest missed $30.4 million in interest payments on the notes in March, but then got a series of extensions while it tried to work out a long-term plan.

In a memo to staff Monday, CEO Leonard Asper said the company is making progress with its lenders.

"We should expect that our efforts to recapitalize the business will go on throughout the summer," he wrote.

"We all know that there is still a lot of heavy lifting ahead of us. But the fact is, the company and all of our businesses have to keep doing business, innovating, serving our customers and beating our competitors."

The company managed to raise about $175 million in fresh financing in May, which it said would give it sufficient credit "to operate its business in the ordinary course as it continues its work to effect a recapitalization transaction."

However, it's believed any debt restructuring deal would require Canwest to appoint new management.

The company's total debt load is about $4 billion. It ran up a big chunk of that total when it bought the Southam newspaper chain and other assets in 2000 for $3.2 billion from Conrad Black's Hollinger group.

It took on more debt when it acquired the specialty channels of Alliance Atlantis Communications more than two years ago.

Shares of Canwest were down 0.5 of a cent to 19.5 cents in afternoon trading on the Toronto stock market.